[Inside Chodong]Administrative Integration Amid Mounting Debt... Why Gwangju Special City Raises Concerns

20 Trillion Won in Government Support for Jeonnam-Gwangju Integration

Limited Fiscal Capacity, Yet Expanded Special Privileges and Authority

Focus Must Be on Businesses and Jobs... Resident Participation Essential

The 'megacity' of Jeonnam-Gwangju Integrated Special City (Gwangju Special City), with a population of 3.2 million, is set to launch in July 2026. This marks a reunion 40 years after Gwangju City and Jeonnam were separated in 1986, granting the new entity administrative authority on par with Seoul Special City. Over the next four years, the central government will provide a total of 20 trillion won in support funds, allocating 5 trillion won each year. The Ministry of the Interior and Safety is in a celebratory mood, to the point of awarding a special bonus of 30 million won to the public officials who managed the practical affairs of the integration.

However, due to the contraction of the local economy, population decline, and limitations in the industrial structure, the fiscal independence of Gwangju and Jeonnam remains at the lowest level in the country. Based on last year's budget, Gwangju's fiscal self-reliance rate was 39.8%, and Jeonnam's was 23.7%, both falling short of the national average of 43.2%. When a region lacks the capacity to sustain itself financially, simply granting autonomy and authority through various special provisions can only result in problems. Administrative integration alone does not attract people and businesses or create a competitive city.

Gwangju's local government bonds exceeded 2 trillion won last year. Its debt ratio is among the highest nationwide, and it is no exaggeration to say the city is burdened with debt even after achieving administrative integration. Jeonnam also faces high risks, with 13 out of its 22 cities and counties designated as areas at high risk of population extinction due to low birth rates and youth outflow. What Gwangju and Jeonnam truly need is not just generous state funding, but rather a fundamental restructuring and efficient fiscal strategy.

A closer look at the special law establishing Gwangju Special City raises concerns. Article 58 includes a special provision allowing the integrated special city mayor to issue local bonds beyond the legal limit, provided the city council gives approval. However, this could worsen already deteriorating fiscal soundness. Article 56 also contains clauses allowing the central government to provide subsidies, make fiscal investments, and offer special financial support to Gwangju Special City. With so many exceptions to standard administrative principles, critics argue that the integrated special city mayor is effectively granted unchecked authority. There are also concerns about fairness, with worries that national finances will become concentrated in one region, leading to regional conflict. Gwangju and Jeonnam must gradually reduce their dependence on the central government and build the foundation for an independent fiscal structure and a sustainable local economic ecosystem.

The residents already know the answer. In a phone call with the reporter, a representative from a youth group in Jeonnam said, "Administrative integration does not suddenly create jobs that didn't exist. Only through active business attraction and job creation can the integrated special city fulfill its function." On the Gwangju City Hall website's resident message board, some expressed similar criticism: "The real reason local areas are declining isn't administrative boundaries, but the lack of businesses and jobs," and "Present practical indicators showing how integration will lead to attracting companies."

The 2010 integration of Masan, Changwon, and Jinhae (now Changwon Special City) should also serve as a lesson. At the time of integration, the population stood at 1.08 million, but by 2024 it had dropped to the 990,000 range, only barely returning to just over 1.01 million as of March this year. Under current law, if the population (including foreigners) remains below 1 million for more than two years, the city loses its special status. Because integration was pushed quickly by politicians without a resident vote, dissatisfaction among locals remains strong. There are complaints that the unique identities of Masan and Jinhae have disappeared, regional imbalances have worsened, and these areas have been absorbed into Changwon.

Gwangju Special City must now guarantee residents' active participation in budget projects and policy design, and seek ways to curb population decline through job creation and improved living conditions. Whether the integration of Gwangju and Jeonnam becomes a 'masterstroke' that ushers in a new era for balanced regional development and local autonomy, or a 'historic blunder,' will depend on how well it is managed.

This content was produced with the assistance of AI translation services.